I'll choose to give this IPO of UECL a miss. There would be 10 million shares offered to public out of total 70 million shares. Not attractive.

After almost 30 years in industry, mechanical, electrical, and construction company UECL, a subsidiary of SGX mainboard-listed United Engineers, announced its initial public offering (IPO) on Tuesday.

Priced at 48 cents a share, the S$33.6 million IPO on the SGX mainboard will enable the firm to drive its domestic growth in public works projects, as well as regional growth in infrastructure investments.

The offering comprises 70 million shares representing approximately 25.9 per cent of UECL's enlarged post-offering share capital of 270 million shares.

Some 10 million shares will be offered to the public, while the remaining 60 million shares are allocated for placement.

In a statement, UECL said it has granted OCBC Bank an over-allotment option of up to an aggregate of 10.5 million additional new shares, representing 15 per cent of the total number of offering shares.

The IPO will open at 9am on February 16 and close at noon on February 22.

Shares are expected to commence trading on February 25.

"The funds are for constructions. We will be (in) joint development with some developers, so that we will be doing the construction projects. That is the area we are going to expand our business, and part of it is going to be used by our M&E divisions, maybe for acquisitions, expansion of business in Vietnam and Middle East," said Chua Hock Tong, CEO of UECL.

In recent years, UECL has engaged in property development in the private residential and public housing sectors by taking minority stakes in joint ventures in Singapore.

UECL is currently exploring the possibility of building its green technology capabilities such as the supply and installation of solar panels and the distribution of more hygienic and energy saving air-conditioners.

Update on 26/02: UECL first day trading closed disappointingly at 41.5 cents or 13.5% lower than its offering price of 48 cents. Well, I was glad I did not subscribe to its IPO. Still monitoring, though...

WITH demand less enthusiastic than expected, the share price of UE E&C Ltd (UECL) closed yesterday at 41.5 cents, 13.5 per cent lower than its offer price of 48 cents. The share price hit an intra-day high of 43 cents, however.

UECL, a mechanical and electrical (M&E) engineering and construction services provider, first announced on Feb 15 that it would list on the mainboard of the Singapore Exchange (SGX) with an initial public offering (IPO) of 70 million shares. UECL raised $33.6 million in gross proceeds.

Of the proceeds, $15 million will be used for property development projects, another $8 million for expansion opportunities and $5 million for expansion of its power solution business. The remaining proceeds will fund working capital requirements.

UECL provides a broad range of M&E engineering services, and has successfully completed many projects including ION Orchard, Changi Water Reclamation Plant and Marina Bay Sands.

It also provides a spectrum of integrated construction services through its principal construction subsidiaries - Greatearth Construction Pte Ltd in Singapore, and United Engineers (B) Sdn Bhd in Brunei.

The company is looking into the possibility of building its green technology capabilities.

It also intends to expand its power solution business in China, and grow its M&E presence in Vietnam and the Middle East.

UECL achieved revenues of $394.8 million and a profit of $15.1 million for the half-year ended June 30, 2010.